The Real Deal New York

Cayre and condo board resolve legal dispute at Blanca Lofts

May 24, 2012 06:00PM
By David Jones

From left: Midtown Equities' Joseph Cayre, attorney Steven Sladkus and the Blanca Lofts (credit: Google Street View)

Developer Joseph Cayre’s Midtown Equities has settled with the board of a small Upper East Side condominium that filed suit in 2009 alleging the building suffered from widespread construction defects, including mold, flooding and other problems, The Real Deal has learned.

The board at Blanca Lofts, a 10-unit building at 206 East 73rd Street, reached an agreement with Cayre to settle the case out of court, according to Wolfe Haldenstein attorney Steven Sladkus, who represented the board.

“The sponsor over the last couple of years committed significant funds to address those issues and other issues that were just sort of improper construction,” Sladkus told The Real Deal.

As The Real Deal first reported, the board originally filed a $10 million suit in 2009 in Manhattan Supreme Court alleging fraud and breach of contract against Cayre, Core Marketing Group, and the construction team including Alcon Builders Group.

The suit also sought rescission of the original purchase contracts.

The case wound through the court system for nearly two years before the parties reached an initial agreement in September 2011, according to court documents. But the parties then continued resolution of the dispute before the state AG and negotiated to bring back many of the original contractors and bring in some new contractors to fix the problems at the property.

“The parties came to a meeting of the minds as to what was fair,” Seyfarth Shaw attorney Richard Resnick, representing the sponsor group, told The Real Deal.

Attorney Ed Safran, representing Foremost Contractors, declined comment.

Meanwhile Trevor Gurwich and Andrea Liberman, who bought two units at the property for $4.1 million, have filed an appeal after Judge Shirley Kornriech dismissed most of their claims against the sponsor, except negligence and breach of contract, related to alleged flooding within two apartments they bought at the building.

Kornreich, in a May 8 decision, ruled that the plaintiffs were “double-dipping” in the suit, because they were living in a hotel paid for by their insurer during much of the period when they fled the apartment.

Attorney Jack Dweck, representing the defendants, was not immediately available for comment.

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